Heckler v. Community Health Services
United States Supreme Court
467 U.S. 51 (1984)
Under the Medicare program, Community Health Services of Crawford County, Inc. (Community Health) (plaintiff) received reimbursement for home health services through a fiscal intermediary, Travelers Insurance Cos., which processed payments on the government's behalf. Uncertain whether certain expenses qualified for reimbursement, Community Health asked Travelers, and Travelers' Medicare manager orally told the company it was eligible, without properly referring the question to the Department of Health and Human Services (HHS) (defendant) as required. Relying on that advice, Community Health sought and received the reimbursement. Travelers later determined, after actually checking with HHS, that the expenses were not reimbursable, and HHS demanded repayment of about $71,480 in overpayments made over the preceding three years. Community Health sued to estop the government from recovering the funds; the district court affirmed the administrative decision requiring repayment, and the appellate court reversed. The Supreme Court granted certiorari.
Whether a Medicare provider may estop the federal government from recovering erroneous reimbursements based on the provider's reliance on informal oral advice from a fiscal intermediary who was not authorized to resolve the underlying policy question.